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is Ebay nuts ? read the last paragraph ---looks like PayPal/Ebay will no longer be involved w/ online gaming
SAN JOSE & MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--July 8,
2002--In a move that will help millions of Internet users buy and sell online, eBay Inc. (Nasdaq:EBAY)(www.ebay.com), the world's online marketplace, today announced that it has agreed to acquire PayPal, Inc. (Nasdaq:PYPL)(www.paypal.com), the global payments platform. The acquisition, which is subject to various stockholder, government andregulatory approvals, is expected to close around year-end 2002.
A natural extension of eBay's trading platform, the acquisition
supports the company's mission to create an efficient global online
marketplace. Payment is a vital function in trading on eBay and
integrating PayPal's functionality into the eBay platform will
fundamentally strengthen the user experience and allow buyers and sellers to trade with greater ease, speed and safety.
The agreement also should benefit eBay shareholders. The
combination of the two networks should expand both platforms while minimizing shared operational costs. Strengthening the marketplace andrealizing the efficiencies made possible by the acquisition willincrease the value of both businesses.
eBay will acquire all of the outstanding shares of PayPal in a
tax-free, stock-for-stock transaction using a fixed exchange ratio of0.39 eBay shares for each PayPal share. Based on eBay's stock price on July 5, 2002, the acquisition is valued at $1.5 billion.
According to preliminary estimates, the recognized purchase price is also expected to include approximately $18 million for acquisition-related costs. The calculation of the final purchase price may vary significantly from these estimates, and will depend upon a number of factors, including the length of time necessary to close the transaction, and the value of eBay stock at closing.
"eBay and PayPal have complementary missions. We both empowerpeople to buy and sell online," said Meg Whitman, President and CEO ofeBay. "Together we can improve the user experience and make online trading more compelling. We can also capture greater value from the e-commerce opportunities occurring both on and off our site."
"eBay and PayPal have built vibrant user networks on the
Internet," said Peter Thiel, Founder and CEO of PayPal. "The beauty of this deal is that it will allow us to offer our communities new tools and added flexibility to do more business. Integrating our services is a win-win situation for millions of current and future online consumers."
PayPal, which will continue to operate as an independent brand, is a leading online payments solution. Approximately 60% of PayPal's business takes place on eBay, making it the most preferred electronic payment method among eBay users. The remaining 40% occurs primarily among small merchants who constitute a potential new audience for eBay. Likewise, eBay's community of 46 million users worldwide represents a growth opportunity for PayPal. eBay's current payment service, eBay Payments by Billpoint, will be phased out after the close of the transaction.
PayPal will continue to provide a variety of consumer services,
including its popular Web Accept product, which makes it possible for independent online merchants to accept payment directly at their web sites. In view of the uncertain regulatory environment surrounding online gaming, eBay plans to phase out PayPal's gaming business after the transaction closes. Gaming providers who use PayPal will have ample opportunity to find alternative payment solutions.
SAN JOSE & MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--July 8,
2002--In a move that will help millions of Internet users buy and sell online, eBay Inc. (Nasdaq:EBAY)(www.ebay.com), the world's online marketplace, today announced that it has agreed to acquire PayPal, Inc. (Nasdaq:PYPL)(www.paypal.com), the global payments platform. The acquisition, which is subject to various stockholder, government andregulatory approvals, is expected to close around year-end 2002.
A natural extension of eBay's trading platform, the acquisition
supports the company's mission to create an efficient global online
marketplace. Payment is a vital function in trading on eBay and
integrating PayPal's functionality into the eBay platform will
fundamentally strengthen the user experience and allow buyers and sellers to trade with greater ease, speed and safety.
The agreement also should benefit eBay shareholders. The
combination of the two networks should expand both platforms while minimizing shared operational costs. Strengthening the marketplace andrealizing the efficiencies made possible by the acquisition willincrease the value of both businesses.
eBay will acquire all of the outstanding shares of PayPal in a
tax-free, stock-for-stock transaction using a fixed exchange ratio of0.39 eBay shares for each PayPal share. Based on eBay's stock price on July 5, 2002, the acquisition is valued at $1.5 billion.
According to preliminary estimates, the recognized purchase price is also expected to include approximately $18 million for acquisition-related costs. The calculation of the final purchase price may vary significantly from these estimates, and will depend upon a number of factors, including the length of time necessary to close the transaction, and the value of eBay stock at closing.
"eBay and PayPal have complementary missions. We both empowerpeople to buy and sell online," said Meg Whitman, President and CEO ofeBay. "Together we can improve the user experience and make online trading more compelling. We can also capture greater value from the e-commerce opportunities occurring both on and off our site."
"eBay and PayPal have built vibrant user networks on the
Internet," said Peter Thiel, Founder and CEO of PayPal. "The beauty of this deal is that it will allow us to offer our communities new tools and added flexibility to do more business. Integrating our services is a win-win situation for millions of current and future online consumers."
PayPal, which will continue to operate as an independent brand, is a leading online payments solution. Approximately 60% of PayPal's business takes place on eBay, making it the most preferred electronic payment method among eBay users. The remaining 40% occurs primarily among small merchants who constitute a potential new audience for eBay. Likewise, eBay's community of 46 million users worldwide represents a growth opportunity for PayPal. eBay's current payment service, eBay Payments by Billpoint, will be phased out after the close of the transaction.
PayPal will continue to provide a variety of consumer services,
including its popular Web Accept product, which makes it possible for independent online merchants to accept payment directly at their web sites. In view of the uncertain regulatory environment surrounding online gaming, eBay plans to phase out PayPal's gaming business after the transaction closes. Gaming providers who use PayPal will have ample opportunity to find alternative payment solutions.
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